Sunday, April 24, 2016

There was once a Zen master named Soryoki, or "empty box," as his name translated. He owned a hobby game store and would sit behind his counter, listening to the various game trade experts who would pontificate at great lengths, while he smiled and sold customers his enjoyable games. He brought small bits of happiness to people with difficult lives, and, he thought, that was as good a profession as any.

"Soryoki," the pontificators said, "The hobby game store is a failed business model from bygone days. The Internet has made you obsolete. Even retail itself will one day be handled by robots, rather than an old man like you, sitting behind a counter. Your boxes are full of empty promises and your business will run out of money and fail any day now."

Soryoki raised an eyebrow and responded, "So you say."

Many years went by, Soryoki modestly expanded his store, and the experts returned.

"Soyoki," the pontificators said, "You are successful because you cheat your customers. Nobody should pay your high prices. You require game publishers to change the rules to let you survive. Plus you live in a foolish community with idiots willing to patronize your establishment, unlike the wise people of other communities. You should quit now and stop victimizing the fools who don't know better. Cease amassing your great wealth through trickery and close your store now."

Soryoki raised an eyebrow and responded, "So you say."

Another couple of decades went by. Soryoki continued to slowly grow his business. He saved for retirement and one day handed his business over to his heirs. Before he left to spend his retirement meditating on the beaches of Mexico, the pontificators returned once more for their final farewell.

"Soyoki," the pontificators said, "It is a miracle you have made it as far as you have. I suppose the last 30 years might, possibly, vindicate your position. Maybe it is your relationship with your customers and not just the boxes that are important. Perhaps belonging to a community has some value we hadn't accounted for in our earlier arguments. It may just be, that we were mistaken about hobby game stores."

Soryoki raised an eyebrow, picked up his beach chair and walked towards the door, pausing only a moment at the threshold to respond, "So you say."

Thursday, April 21, 2016

BIG STEP BACK
I started this post saying "I am not a lawyer." This is a dead give away that I'm about to step into dangerous territory. That and "You people" are never good ways to start a sentence.

The premise of this post is that volunteers are clearly employees/independent contractors of some sort, according to the law. This clarity does not actually exist, legally, if you talk to attorneys, which I have, since posting this. It doesn't mean volunteers aren't one of these classifications, only that the legal advice is not to worry about it. The law is unclear, convoluted or it may just mean your likelihood of ending up in court with such a case is very low.

You people take that in mind if you're reading this article for the first time. I am not a lawyer.

AND BEGIN....

I am not a lawyer, but lets take a shot at the current controversy. Michael Bahr needs to write a blog piece, since he is a store owner with a law degree (but, he'll point out, is not your attorney and has no legal advice for you). There's a lawsuit against Wizards of the Coast (WOTC) from four Magic judges claiming Magic judges are employees. As WOTC does not properly compensate judges like employees, including not paying them wages and other benefits, the lawsuit asks for back pay and other damages. It's no surprise WOTC strongly disagrees with the claims in this suit. However, when you look at the legal definitions of volunteer, be it in strict California, where this suit was brought, or federal, it's clear Magic judges certainly don't fit the volunteer bill.

We don't need to go far to disqualify Magic judges as volunteers, all we need is the first requirement under the Department of Labor. Volunteers can't work for for-profit companies. Done. Oh, did you think calling your game store folks "volunteers" was somehow legal? Well, it's not, and I'll get back to that.

Now that we understand they're not volunteers, we then have two questions:

Are Magic judges independent contractors or employees?

Who do Magic judges contract or work for?

They certainly act more like independent contractors, rather than employees, at least when they work for game stores. However, Wizards of the Coast has a large number of requirements on hours worked, locations required for judging, judge certification, and work requirements. They exert strict discipline on judges, which some believe is why this lawsuit was brought in the first place. WOTC also compensates judges with thousands of dollars of promotional items and free product. Because of all these work requirements and tangible compensation, WOTC may have stepped into a de facto employer relationship. Again, just because I use terms like de facto, I am still not a lawyer. However, as a layman, it's clear the more control you have over a worker, the stronger you move away from independent contractor towards employee. Magic judges don't have much independence, when it comes to how they do their job. Again, they're not volunteers by DOL definition, so judges are one of the two employment definitions.

How much liability does this open up to hobby game stores? The answer is a tremendous amount, if you're relying on "volunteers," which I've used in quotes, written or in the air, for some time now. If you're not paying and issuing 1099's or putting all your "volunteers" on staff as employees, you're breaking the law. There is no gray area. We don't need this lawsuit to know this. Now, the biggest judge issue for any store, by sheer volume, will be Magic judges, and WOTC impedes a stores ability to hire them.

Training an employee to be an L1 judge is easy, provided your L2 or higher judge anoints them. However, to get beyond that level, WOTC has a host of requirements, including working at other stores. That, and several other requirements are a problem for me, as my employee. So I personally see the structure of the judge program keeping stores from properly hiring any level of Magic judge. It's a separate issue, but I would argue, if this lawsuit came back my direction, that WOTC is the one you want to talk to first, as their de facto employee (that term again) and then we can talk 1099's for any judges willing to take one (many won't, due to hard and soft WOTC related requirements and compensations, which is why there's restraint).

The fallout for game stores from this lawsuit could be a significant barrier to entry, once store owners realize the gray area is not actually gray at all, but quite black and white. This is the biggest of the dirty secrets about the game trade, the "volunteer" issue. I recall sitting in a Gama Trade Show seminar last month where the "volunteer" air quotes were flying so fast, they could have put an eye out. Please, spare me. The second dirty secret is the improper use of retail space for assembly purposes, and all that entails. Notice how I get more vocal on that as my assembly zoned construction project gets closer to completion.

Some stores already 1099 volunteers or employ them, so they're ahead of the curve. What we need is a wider understanding and, I hate to say it, wider enforcement. As we see higher minimum wages, higher workers comp costs, and the elimination of "volunteers," we're likely to see two tiers of stores. One store will toe the line, while the other, like we have now, will continue to skirt the law, pay their staff in peanut butter sandwiches and Magic packs, and skim their sales tax receipts. So if there's an upside to a game changing lawsuit, hopefully it's a more even playing field.

Saturday, April 16, 2016

What's trending right now in the game trade is good communication. It's gentle conversations between publishers and retailers, something uncharacteristic from the past, where it was about shouting past each other. Past retailer forums were echo chambers of the same people with the same complaints, amplified out of frustration. Nowadays, we've got behind the scenes communications and groups of professionals on both sides in more civil forums, both online and offline.

As a retailer, I often have to watch what and where I say what I say, since past tendencies were about fruitless gripes rather than crafting meaningful solutions. Sometimes you need to vent, but better is to find a solution with the right people. Professional brick and mortar game store retailers have a lot to offer publishers, if the two groups can sit down and discuss, and surprisingly, that has been happening.

For the last couple of years, demo programs have led the way to understanding the value brick and mortar provides. Demo games used to be something a retailer absorbed, a game that got opened and showed off at retailers expense, in hopes of better sales. Now that it's understood demo programs are sales force multipliers, there are hundreds of publisher sponsored demo games available at lower prices for this purpose. 332 demo games can be found on the Alliance website.

This year we're seeing the problem of product devaluation hit hard. Publishers understand that professional retailers won't provide their services, their sales force multipliers, if they can't compete in the marketplace due to sharp devaluation. It started with Asmodee North America (ANA) restricting access to product to shore up the sharp devaluation of their games (mostly because of bad brick and mortar retailers). ANA is a huge part of our sales, since they own not only Asmodee, but Fantasy Flight Games, Days of Wonder, and the Catan line.

Next came Privateer Press. We sold and ran events for Privateer Press since we opened in 2004, but we dropped it cold in January after it became so devalued online, it held the title of worst performing line in the store. To give you an idea of demand for this game, we blew out $40,000 worth of product at 40% off in 6 weeks. Super strong demand, plus super low sales at MSRP, equals a devaluation problem.

Privateer Press has announced a plan to support brick and mortar by removing "free riders" from the mix. The effect was immediate and with the announcement of a Mark III Warmachine/Hordes, we're back in. We'll be bringing in the biggest launch kit, complete with demo table. This does nothing to eliminate the second biggest problem with Privateer Press, the incessant SKU creep, but it does give us a chance to compete, which is enough for now.

This week Ielloannounced a plan to allow brick and mortar stores to receive games two weeks earlier than everyone else. Iello is one of those companies that deeply supports demo games (41 listings on Alliance) and they're listening. What we've found from early release games is they tend to spike hard for us during the early period, as their value is retained and access is limited. We've seen this with Asmodee early release experiments, as well as with Dungeons & Dragons books, which we also receive about two weeks early. This also works against blatant street date violations from companies like Target, who are ambivalent about the rules.

If you're a publisher and desire the kind of dialogue that leads to meaningful change within the game trade, or if you just want to be the main contact for such discussions, email me and I'll get you in touch with the right people.

Tuesday, April 12, 2016

Wizards of the Coast has a new CEO, Chris Cocks from Microsoft. This falls into my tidy little paradigm of Dungeons & Dragons: Stable IP Edition, in which 5th Edition is basically a stable platform for a more lucrative, digital product line. Who else to direct such an endeavor than a Microsoft executive?

Here's the thing about this stable IP: It's not so stable anymore. The problem with Dungeons & Dragons is it's drastically devalued in the marketplace, mostly through Amazon. Mostly because Wizards of the Coast allows them to sell it at below retailer costs at distribution. It's actually cheaper for me to buy from Amazon than from my game distributors.

This of course, heavily effects sales, which means many retailers are abandoning Dungeons & Dragons. Can you imagine? I highly encourage retailers to do just that with any product line that doesn't work for them. Try to get it to work, especially with organized play, and if it doesn't? Dump it hard. Send a message.

Also, Dungeons & Dragons organized play is kind of garbage too. This needs to be shored up if you want Dungeons & Dragons: Stable IP Edition to be around long enough for a slew of profitable video games and movies. Retailers need original, exclusive content to run events that draw in customers who buy books. At least for retailers who haven't given up on D&D due to WOTC allowing it to be treated so shabbily.

So hey Chris Cocks, good luck over there! If you're hoping to leverage this fantastic IP, let me suggest you shore up some critical failings. Like you, retailers love Dungeons & Dragons too and want it to be around for years to come. Hopefully independent retailers can support that and not just be a launch pad for your digital future.

Saturday, April 9, 2016

Our long awaited expansion begins Monday morning. Please ask questions in the comments and I'll do my best to provide answers. Here are some I've made up:

Right, what's all this then?
We ran a Kickstarter campaign over the Summer of 2014. It was successful, with 224 people pledging $28,493. The project has been ongoing since then, with architectural plans completed in 2014 and permits approved and ready to go. This has been a "shovel ready" project for a while now.

How long will construction take?
It's scheduled to take 6 weeks. It should be completed at the end of May. There are penalties for the project running late, so I don't expect much slippage.

What are the advantages to me?
We will be able to seat 121 people on two levels. We will be able to have larger events, and multiple events each night. For the most part, our existing events will have room to spread out and grow, but we're also interested in hosting new events.

Bathrooms, air conditioning and heating, and even a drinking fountain will bring our space up to the building codes and should provide a more pleasant experience.

Any Game Center policy changes?
No. We've got scheduled events that use this space and open play when nothing is scheduled. That policy won't change. One advantage is Paladin Club members (from our Kickstarter) will get special access during most periods for their personal games.

Can you tell me more about the financing?
Nobody actually asks that question, but, I'll answer it anyway. The total project cost, at this point, looks to be around $120,000. The Kickstarter covered a very small amount of this. We received a loan from Opportunity Fund to cover additional costs, which we've since paid off. Our new lease covers about $20K or so of expansion costs. We're soliciting loans from the world at large for the rest, and we've secured about half the money we need, despite the project starting now.

Will you be open during this time?
Absolutely! The retail space will be open continuously during construction. The Game Center is closed, but we will have room to play in the retail space during the construction period. Our goal is to maintain continuity with existing events, even if we're a bit tight on space. Some regular events may not fire, however, due to their space constraints.

What can I do to help?
Keep coming for one. Please keep shopping with us. The tendency is to wait out the mess and come back after. That could very well kill us. We ask you continue to shop with us as you have before, and, if possible, consider buying a little more than usual to help us through these difficult times. The biggest threat to this project is people avoid us during construction.